Missed connections: Limbo in high tech's culture clash

Benito Santiago, a San Francisco resident, is getting evicted from his home. Many attribute the rise of Ellis Act evictions to the influx of highly paid tech employees.
James Martin/CNET

On a recent Friday afternoon, Tammy Vaitai stood at a dais at the Bayview Shipyard in San Francisco. Unless you've walked into the youth-run Old Skool Cafe in that neighborhood, where she's the general manager, you probably don't recognize her name. But that afternoon, Vaitai was addressing a group of dignitaries that included some of the city's heaviest hitters: Mayor Ed Lee, Police Chief Greg Suhr, and prolific angel investor Ron Conway.

"Whether you are the hardworking engineer at Google, the busboy at Limon Rotisserie, a police officer in the Tenderloin, or simply a loyal fan of the best team in the NFL, the San Francisco 49ers, every moment is an opportunity to either pave the way, or shut the door for the person behind you," said Vaitai, as the audience roared. (It helps to mention the home team.)

Vaitai was introducing the mayor for his annual state of the city address. It was the type of civic event normally covered only by local press, but this speech had wide-reaching implications. While Lee was addressing some particular issues for the city itself (he unveiled an ambitious plan to speed the development of housing), the real intent of the address was clear: play peacemaker between the tech industry and the nontech community -- two groups that exist far beyond the less-than-50-square-mile bounds of San Francisco.

An angry debate has grabbed headlines as an influx of highly compensated workers -- many in high-tech jobs -- is being blamed for pushing up the cost of living for San Francisco residents increasingly fearful of being displaced by the wealthier newcomers. For example, the average monthly rent for a two-bedroom, one-bath rental unit in San Francisco is a jaw-dropping $3,135, and that's up almost 39 percent since 2009, according to Real Facts, an apartment data firm. Animosity against the tech industry has skyrocketed, often taking the shape of protests condemning the shuttles that ferry employees of Google, Facebook, and other tech companies from their homes in the city to corporate campuses in Silicon Valley. Demonstrators have even taken to harassing individuals, as one prominent Google engineer experienced when an activist group protested at his house.

Similar scenarios have played out in other communities around the nation where gentrification has changed old neighborhoods. But it is San Francisco, with its proximity to Silicon Valley, where the culture clash has put the technology industry on the defensive in very public fashion.

So lately, the term "state of the city" seems less like the title of a yearly address and more like an existential question. With her presence at the speech, Vaitai symbolically accepted the proverbial olive branch, but Lee was the one to do the heavy lifting in the mediation. "Incredibly, it's become fashionable for some people lately to dismiss the significance of our broad-based recovery," Lee told the crowd. "They speak of it, remarkably, only in terms of the negative, perhaps the first time in history that the creation of too many good jobs has been criticized."

Zeroing in on the housing crisis, Lee continued. "Too often, in frustration, some people turn to easy targets instead -- a commuter shuttle bus, or a company's IPO, or even toast," he said, referring to a $4 menu item at one of the city's rapidly multiplying gourmet latte-houses.

In this story, technology itself is neither villain nor hero. The issues here are not the worthiness of a culture built up around smartphones, Facebook posts, and the data-driven cloud services on which we all increasingly rely. Rather, this is a coming-of-age tale of the post dotcom boom, bust, and rebirth, a time of tension amid change. There have already been many smart things posited about how to solve the problems. Here, we give you a snapshot of San Francisco in limbo.

Hitting home: Evictions

When I first spoke to Benito Santiago, his upbeat, hepcat voice rang out from the other end of a crackling phone line. He asked me to hold while he switched receivers. "Sorry, it's an old phone. Sometimes the cord comes out," he said.

Santiago is a 63-year-old San Francisco resident getting evicted from his home by way of the Ellis Act, a piece of California legislation that allows landlords to get rid of tenants if they choose to get out of the rental market altogether. Many say the uptick in Ellis Act evictions -- they've doubled to 116 in the past year -- stems from the rapid rise of property values, in part thanks to the rich young residents moving in. (At Google bus protests, a favorite chant is, "Stop evictions!")

Twitter: A symbol of the times, at home in the heart of San Francisco.
James Martin/CNET

Santiago makes his living working with special-needs children at a local school, and on the side he volunteers as a ballroom-dancing teacher at San Francisco City College. Maybe it's appropriate that he shares a name with a local sports favorite, one who crouched behind home plate when the San Francisco Giants made a World Series run in 2002. ("I didn't know who he was," said Santiago. "People would tell me, 'Hey, nice hit.' When you work with kids, you're not supposed to hit!")

When Santiago got the notice of eviction in December, he immediately started giving away his belongings. The letter gave him a month to get out, then the grace period was extended to 120 days from when he got the first notice. So his extra clothes and furniture went to family, friends, and Goodwill. His record collection went next. Motown, merengue, foxtrot albums left his shelves. Then the shelves came down too.

"Ellis Act evictions are only one piece of the housing crisis gripping San Francisco," said city supervisor Jane Kim. Indeed, over the past decade, there have been years with higher Ellis Act rates, but the recent rise in that type of eviction, coupled with the fact that San Francisco rents have reached nosebleed levels -- triple the national average -- paints a bleak picture for the city's tenants. Kim mentions she's working on increasing relocation fees given to evictees. Right now they're $5,000.

The technology industry's presence in San Francisco is inescapable. In recent years, it's become en vogue for technology companies, like Dropbox and Twitter, to set up shop in the city, instead of some 40 miles down the highway in Silicon Valley. And unlike the companies of the dotcom bust, these firms are mature, which -- as much as the hip, counterculture-embracing tech scene would hate to admit -- brings with it the standard corporate culture. And great wealth: Twitter's initial public offering last November, for instance, created 1,600 millionaires, according to research firm PrivCo.

In the dustup between tech and nontech, Santiago falls squarely on one side. He's played his congas and drums at anti-Google and anti-Twitter rallies, complaining that those companies are pushing out "starving artists" like himself. Still, he acknowledges the benefits accrued to society in general from the tech sector. He first got his hands on a computer because he needed to take courses to renew his early childhood education certificate. When City College wouldn't accept a handwritten application, he bought a PC. Now he even has a Facebook page.

There are numerous other well-covered examples of people acting out toward the tech industry, case in point being the throngs of people blocking tech shuttle buses. And then sometimes it gets more personal. Last month, for instance, Google X engineering manager Anthony Levandowski, who was recently profiled in The New Yorker for his work with driverless cars, was the target of a protest at his home in Berkeley. An activist group banged on his door, hung fliers in his neighborhood detailing its grievances, and held a banner in front of his house that said: "Google's Future Stops Here."

And it's not just the Bay Area. Also last month, angry taxi drivers in Paris slashed the tires and smashed in the window of a car representing Uber, the often controversial ride-hailing service that's emblematic of the latest breed of Silicon Valley startups disrupting old industries. The shattered glass cut the hands of the car's passengers, Eventbite CTO Renaud Visage and the co-founder of startup Five by Five, Kat Borlongan.

But what fails to be captured in much of the daily media coverage of those events (including my own), is the thread of uncertainty that runs through each of these stories -- for the tech workers wondering when the demonstrations will end, the displaced residents wondering where they will go next.

At this rate, Santiago needs to be out of his one-bedroom, rent-controlled apartment by March. But he's fighting for a yearlong extension because he is a senior citizen (that status kicks in at age 62). For now, he doesn't know when he'll have to vacate, but nevertheless, he's preparing for what he thinks is the inevitable.

"I still have to leave," said Santiago. "And I'm still giving things away, so I can travel light. I just want to leave on my own terms. I don't want to get booted out."

At a standstill: Google buses

At the center of the controversy are the so-called Google buses, though the search giant's name is just a stand-in for all the tech companies that hire private coaches to transport workers to and from the peninsula and Silicon Valley. Apple, Facebook, Cisco, Genetech, and many more firms all use shuttles. At rallies, angry protestors have blocked the buses as they try to depart, sometimes holding a banner and wooden casket in front of the bus with the words "Affordable Housing" scrawled across it in red. One protest turned violent, resulting in a broken bus window.

Another source of irritation for critics: The buses haven't paid a cent to use transit stops designated for Muni, San Francisco's tax-funded public transit system. Last month, the city approved a pilot program that would allow the shuttles to load and unload passengers at 200 Muni stops around the city for a fee of $1 per stop -- which would earn the city $1.5 million, a sum that would recover only the costs of operating the program. The San Francisco Municipal Transit Agency cites Proposition 218 as the reason for implementing such a low fee, claiming it can't charge more than cost recovery without putting the issue to vote on a citywide ballot. Before the program, the bus providers had a "handshake deal" with the SFMTA, Gary Bauer, CEO of the shuttle company Bauer's Intelligent Transportation, told CNET.

Google declined to comment on the bus protests.

Protestors blocking a tech shuttle bus
cjmartin via Flickr

A few weeks ago, I sought to board a bus to see for myself what the commotion was about. It's easy to see the allure: Instead of cramming onto public transit at rush hour, you sit in a leather seat enjoying a Wi-Fi connection for the commute home. And that commute is significantly shorter. The average travel time from almost any shuttle stop in the city to Google's campus in Mountain View, Calif., is an hour and 10 minutes. On public transit, it's over an hour and a half, according to a recent transportation study by researchers Danielle Dai and David Weinzimmer at the University of California at Berkeley. Not to mention the ride is free.

So I waited at a pickup spot for one to show up: a mammoth, black, 56-seat shuttle with the word "Bauer's" plastered along the side and a shiny Mercedes emblem on the back.

The driver, dressed in a black suit and tie, let me on the empty bus. As expected, it was quite appealing: wide, plush seats, carpeted walkway, wood floors at the doorway, electrical sockets, tray tables, and TV monitors overhead. But my luck would end there. Asked if I could tag along on his route, the driver -- who preferred to remain anonymous -- politely declined.

"Bauer's could have spies on here."

"Is that something you're realistically worried about?" I asked.

"You never know."

Perhaps the driver is being paranoid. (For the record, the company denies any such use of spies.) But his uneasiness does underscore just how heightened the tension has become around the shuttles.

Former bus driver Rick Fuchs described the animosity in BuzzFeed in July:

"Pedestrians and motorcycles and cyclists are all sort of trying to, in my mind, kind of sabotage me. It is important that I keep level headed and keep the task at hand. 'You have a couple minutes to blow, so don't worry about that bicyclist that just hit the mirror.' Because that happens a lot.

"I will be sitting at a stop sign or a red light and a bike will come and they will hit my mirror on purpose, or accidentally bash their head on it. In which case it puts me out of service. Because my bus is so long, those are my eyes. I literally almost can't even move. One of our road supervisors has to come out, because you have to be sitting in the seat and have someone else adjust it."

In order to understand the kind of pressure the situation between tech and nontech has put on both sides, it's important to first acknowledge that there is indeed a disparity. According to the Berkeley transportation study, over 67 percent of tech shuttle riders make more than $100,000 a year. The study -- which surveyed a fairly small sample size of just 130 riders -- also shows that the average shuttle commuter is a 31-year-old male. The SFMTA took information from the study into account when it came up with the pilot plan.

Those figures, when compared with recent statistics about San Francisco's middle class compiled by the San Francisco Examiner, show how wide the income disparity is. According to the newspaper, the median household income in San Francisco -- which can comprise the joint earnings of a person and his or her spouse -- was $73,000 in 2012 (and that's $20,000 more than the median household income in the broader United States).

The interior of a tech shuttle bus. (The windows on the bus have been deliberately washed out so as not to reveal the driver's route.)
Richard Nieva/CNET

Another one of the sources of ire for protestors in San Francisco is the idea that the young techies moving into the city are transient in ways that extend well past just riding on a bus.

"They are perceived as interlopers who don't have a commitment to the community," said Margaret Weir, a UC Berkeley professor, who teaches public policy.

The transportation study would, in part, reinforce the image that the tech employees aren't interested in putting down roots in San Francisco: 85 percent rent their home and only 3 percent have children, and most cited the quality of a school district as a factor least important to them. But to be fair, owning property in San Francisco is something that's open only to exclusive ranks, no matter who you are. And a childless 30-something could be forgiven for not putting school districts at the top of his list of priorities.

Supporters of the bus program warn that people shouldn't conflate the tech buses with a larger animosity for the companies that use their services. (After all, who can find fault with fewer cars being on the road?) Right after San Francisco's pilot program was approved, Michael Watson, Bauer's vice president of sales, told me at city hall that the company was sympathetic to the people facing gentrification problems like housing issues. "But I don't know what tech buses have to do with it," he said.

The future: Common ground?

But for all the derision that the debate over the Google buses has caused, one byproduct has been the light it has shed on the city's housing crisis. In his state of the city speech, Mayor Lee unveiled a plan that calls for the building or rehabilitation of 5,000 homes a year over the next six years. By comparison, in 2011, only 348 housing units were completed, according to the San Francisco Chronicle. The mayor also called for reform of the Ellis Act.

With the economy booming, is all of this just unavoidable collateral damage?

"No, I don't think it's inevitable," said Enrico Moretti, an economics professor at UC Berkeley who has been looking at the relationship between the tech and nontech worlds for over a decade. He points primarily to the housing infrastructure problem, which was a mess way before the techies moved in. "I think a lot people think the growth in tech has benefited only those in tech," he said. According to his research, every tech job in the Bay Area is responsible for five nontech jobs, in areas from architecture to restaurant service to real estate.

"I still have to leave...I just want to leave on my own terms."
--Benito Santiago, San Francisco resident

Still, there are some tech figures who certainly aren't helping the situation. Tom Perkins, co-founder of the venerable Silicon Valley venture capital firm Kleiner Perkins Caufield Byers, compared criticizing the rich to the anti-Semitism that led to attacks on the Jewish population in Nazi Germany. And startup founder Peter Shih notoriously wrote a blog post complaining about everything from San Francisco's homeless people to its weather to "girls who are obviously 4's who behave like they are 9's," prompting people to post fliers in downtown San Francisco demanding that he skip town.

But as much as those folks make headlines for their tone-deafness, there are prominent techies who say they are willing to work to help nontech folks. "The tech community is committed to working with the mayor about how we can continue San Francisco's economic success for the benefit of everyone," Conway, who declined to be interviewed, told CNET in an e-mail. "We're all in this together and we're looking forward to addressing our common challenges, particularly housing, the cost of living, and education." Conway also founded sf.citi, an organization that seeks to propel the tech industry toward civic action.

And there is at least some effort in trying to procure goodwill from tech companies. Twitter, which receives a major tax break for having its headquarters in San Francisco's rundown Mid-Market neighborhood, holds "Days for Good," in which its employees volunteer in the area, as part of a community benefits agreement the company has with the city. Twitter did not respond to requests for comment for this article. Google says it has similar programs. "Google strives to be a good neighbor in the communities where we work and live," a spokesperson said in a statement. According to that spokesperson, Google employees volunteered 2,000 hours of community service last year and the company donated $20 million to Bay Area nonprofits.

Indeed, the opposite of waiting in limbo is working toward change. And there has already been much of that, from both sides of the divide. But to chalk it up to just putting in more work would be to undermine the complexity of the situation. For some, like Santiago, waiting is the only choice.